It’s not just HMRC who make computer errors.
I got the following in an email form Easyjet at 2.20 this morning:
Dear RICHARD MURPHY
We are really sorry to inform you that we have been notified by the French Authorities that there will be Industrial Action in France by Air Traffic Control on Tuesday 7th September 2010, this means that your easyJet flight 3467 to CPH on 07/09/2010 has regrettably been cancelled.
We always aim to provide the best possible experience when flying with easyJet, however from time to time situations such as this arise which are out of our control.
Which is interesting, as the flight landed in Copenhagen, admittedly 2 hours late, at 11.45 last night — and I was on it.
The private sector is really not very good at these things.
And we imported their inefficiency into HMRC.
That’s when it all went wrong.
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@Richard Murphy
” a great many politically moderate people”…I wonder who you could mean?
You don’t seem to mean 6.8m Lib Dem voters, and by that measure you can’t mean the Trades Union movement, with its 6.7m members. If 6.8m is not mainstream, then neither is 6.7m
Democratically speaking, you must mean the middle ground of UK voters, who by and large voted Balairite before switching to the Tories.
But hold on…judging by your posts you are certainly not speaking from that ground.
Maybe my error is using a democratic measure?
http://www.oecd.org/searchResult/0,3400,en_2649_34533_1_1_1_1_1,00.html
http://news.bbc.co.uk/1/shared/election2010/results/
What a complete load of unsubstantiated old cack.
This is left-wing revisionism at its vile worst. Virtually all the service standard improvements we have seen over the last generation arose because of private sector innovation.
Remember when supermarket shopping was something housewives had to do because shops basically only opened when workers were at work. Our state had deemed that Sundays must remain special and it was the pressure of the dirty private sector that eventually got them to move.
Or take British Telecom. You used to have to wait months to get a new phone line put in, at great expense, and calls cost a fortune. Now, thanks to its privatisation and a great deal of private sector competition, the service from all providers is infinitely improved. No-one would be able to offer BT’s former service offering; we just wouldn’t take it.
Or take air transport. You have some serious gall complaining about Easyjet, one of the cheapest airlines there is. In the “good old days” you accepted British Airways or nobody. That flight to Copenhagen would have cost a small fortune, and you can forget about the luxury of receiving an e-mail on the day. You had to ring them to reconfirm and, if you were lucky enough to ring on the right half-hour and Saturn and Jupiter just happened to be in alignment and the receptionist was having a good day, you might be able to check that your flight was still flying. Otherwise you would just have to turn up at the airport and hope that your flight was still on.
Quite how you believe HMRC has had inefficiency imported into it by the private sector is anyone’s guess. It has no competition. If you wish to remain in the UK, you can’t choose to have EasyTax administer your tax system instead of HMRC. You have to take what you’re given, and what you’re given is the direst, lowest common denominator tripe that the public sector can offer. That’s what it does. It will never improve because it is in hock to the unions and its management is too feeble to manage them. And they will never improve because the main weapon used in the private sector against crap management – sacking people – is generally unavailable in the public sector.
However, we should applaud the fact that HMRC is now contacting us to tell us that we’re due refunds (or extra bills). Not that long ago, they would have held on to the refund forever.
@Rob Horton
Absolutely, unreservedly agreed.
In fact the surest way of closing the tax gap, whatever it size gap, is not like Richard suggests to hire thousand upon thousand of unionized tax inspectors. (Richard cannot really say otherwise considering who pays his bills).
The surest way would be to outsource the entire tax collection program, and to let the outsourced provider take a share of any tax collected that were previously evaded.
I think you’re confusing levels of output with productivity there.
The Kings Fund report is clear that output went up – just not as fast as inputs went up.
There could be a lot of reasons for that. In labour-intensive services, it’s harder to get productivity improvements than manufacturing; there’s a very good paper by the economist William Baumol on this, from back in 1968. We’d need to compare productivity in the NHS with other sectors where there was a comparable labour intensity – not just “all private services” which includes stuff like financial services, which is totally different – to get a good comparator. I think the ONS have done some work along these lines – I will dig it out for you next week when I have more time.
But even if productivity goes down you are still getting more output for more input – unless the fall in productivity is catastrophic. Absolute output would have to be static, or fall, in response to increased inputs for your point to be correct – that higher inputs don’t deliver better services. And that certainly isn’t the case.
It’s entirely possible, for example, that the PFI disaster has negatively impacted on productivity – to name one possible culprit. It’s certainly increased input costs because NHS trusts now have to pay huge amounts of money to private sector infrastructure providers who built hospitals very expensively and in some cases very poorly. I certainly don’t want to pretend New Labour did everything right here.
This has certainly been a v interesting discussion – I only wish I had more time to devote to it at the moment.
@Howard
Let’s not open up the deficits issue (of which there are two but that’s another thread).
Let’s also restrict ourselves to Tea Party/Orange Book as it applies to social justice, tax and the State.
The Tea Party (TP) is the current political manifestation of the classic Liberterian/Minarchist political theory. It seeks to explore the minumum funding and activity limits of the state, regressive taxation and believes social justice is naturally provided through the good nature of people in the community and via charity but is currently crowded out by the State. (I’m not agreeing, just summarising my understanding as I think it relevant here).
The OB is the current UK political manifestation of Social Democrat/Whig theory. It has an unshakeable belief in social justice, and believes the state has an important role in funding that. It also believes that taxation to deliver social justice should be progressive in nature.
If that sounds a lot like Labour, thats because it is. That also explains why during the coalition negotiations, many in Labour though the LibDems were natural allies. The objectives overlap hugely.
OB’ers however wish to keep a safe distance from Labour because we see different means of achieving the social justice ends we share with Labour. It does not follow to OB’ers that the State is the best or even a good enough delivery mechanism for social justice. It is frankly awful at delivering most services. That does NOT mean the services should be withdrawn. That does NOT mean the state shouldn’t fund them via progressive taxation. It does NOT mean social justice is less important.
But Durkheim told us that the first purpose of any beuraucracy is to perpetrate the beuraucracy, not deliver its nominal aims. That also applies to state delivery mechanisms.
We look to places like Scandanavia with admiration, and notice that the state funded/mixed delivery model works extremely well. We wonder if that would work here. We also notice that Scandanavia has progresive taxation, but they de-emphasises Capital and Central Taxes in favour of Consumption and Local taxes. We wonder if that would work here. That’s not lower taxes – that’s taxes that rewards capital formation, wealth creation, local power and saving, but is less encouraging of borrowing, power hoarding and consumption. Only a liberal economy has the potential to fund social justice.
The Labour/OB debate then is about means, not ends. It theory terms it is a relatively trivial difference. TP has fundamentally different intentions/objectives/policies with regard to tax and social justice. If one believes in progression and social justice, TP is never an option. I geniunely have no idea why you would think it is.
The similarities between TP and OB that do exist are superficial – we are both questioning of the states role in DELIVERY of services. But the underlying intentions are utterly different.
Not a whole lot of scope for confusion to my mind, but it does involve differentiation between ends and means.
@Gary:
i. I don’t think different readings of this point are possible: the WB/PwC report graphs tax payable against tax revenue, so clearly these are different things.
ii. Different readings might just be possible here. I read the paragraph’s initial reference to developing countries as qualifying the point that follows; but I suppose it’s possible (if illogical) that the authors/editors switch to address all countries in the following sentence, without mentioning it. If not, then by definition they are not using the 175 countries that the DBI itself does.
iii. On the King’s Fund, I’ve quoted the section about whether output rose with more money, and the answer is a clear yes. You seemed n not to have seen that? Unsurprisingly, as I noted, productivity may have fallen with a large injection of funds. But of course it would have to become negative not to increase the services provided, and I don’t think anyone has suggested that? Yes, if productivity hadn’t fallen then the same thing would have been cheaper; but if my aunt was a man she’d be my uncle. [As a side issue, the KPMG comparison with private sector productivity presumably doesn’t relate to an imaginary private sector NHS, which I guess would be the relevant comparison – so I’m not quite sure what it can really mean.]
iv. I think if your only concern is with OECD economies we could have saved ourselves a lot of work in the above (!). In addition, you seem to be accepting that a fairly high ratio of tax/GDP is warranted (from your comments, presumably you think it is between 35% and 95%?), and your question is then at what point do the benefits of increases in tax/GDP diminish to zero, assuming that they do?
Is this right? In which case we could dispense with the largely irrelevant issues of (i) countries with much lower tax/GDP ratios, and (ii) the size of (positive) output changes from additional funding to one particular service in one particular country, and instead focus on outlining the criteria on which we would judge the decision. Presumably we could reach agreement that we are all motivated by improvements in human outcomes, and then agree how to straightforwardly measure/proxy for these – e.g. life expectancy etc. That would allow us to bring together existing/new evidence on the specific concern that you have (assuming, of course, that people still think it worthwhile to engage), instead of trying to hit a moving target.
What do you think, Gary? Is this more or less the question, and does this sound a sensible approach? If so, how would you suggest we capture improvements in human outcomes (i.e. what variables to use), in order to assess the impact of tax/GDP ratios?
Alex
@Alex
I don’t think the question has changed at all. The target isn’t moving. Richard – in the context of HMRC i.e. the UK – said that more revenues would deliver better services. I asked how he (you?) knew that. We then went through a long process whereby I was told I was lazy, abusive, extreme and was insufficiently competent to understand what evidence was. Then I had to credentialise myself to Richard’s satisfaction. On the way I produced evidence/datapoints that suggested (inter alia):
1) If more revenues to HMRC would produce better services, how do you explain Italy and other counterfactuals?
2) If more revenues to HMRC would produce better services, how come more revenues in the NHS are associated with falling productivity?
3) If more revenues to HMRC would produce better services, how come WB/PwC think that more ‘taxes payable’ (whatever that means) is not associated with better services?
I have not (knowingly) made this about developing countries and, where others (including you) have raised it on a couple of occasions above I have always tried to make it clear that is not what I thought Richard was raising nor what I was querying.
And STILL the question remains unanswered and unchanged: Richard says that, with more revenues, we (here in the UK) can expect better public services. HOW DO YOU KNOW?
Given that Italy has higher Tax/GDP, HOW DO YOU KNOW?
Given that rising revenues in the NHS are associated with falling productivity, HOW DO YOU KNOW?
Given that WB/PwC think that more ‘taxes payable’ (which is largely the same thing in developed countries such as the UK) is not associated with better services, HOW DO YOU KNOW?
PS: As an aside, you have asked me a couple of times to address the link between the paragraph I quote and the proximate graphs. In developed countries, tax rate and tax payable i.e. money appear to be sufficiently synomynous as to be practically interchangeable. They only diverge for developing countries (as you have pointed out), but since that is not Richard’s assertion (since Richard is talking about HMRC), that is not relevant here. Again, I offer no challenge to your assertions re: developing countries. But I’ve said that already…
@Gary Taylor
In my own good time I will deal with these issues
In the meantime I not you say your CV has not got through moderation.
I have no idea why. I have not, as far as I know, deleted it, and nothing is waiting.
Would you like to try again?
@Richard Murphy
“For most purposes, I think that Mr Taylor can be regarded as an expert. He has considerable past experience, which he describes in his witness statement…and the content of his evidence displays to my mind that he plainly does have extensive knowledge and understanding of the field to which the evidence is directed.”
http://www.bailii.org/ew/cases/EWHC/Ch/2009/797.html
“found Mr Taylor to be very knowledgeable and have no hesitation in relying on his evidence which was, with one exception, backed up by independent evidence…Because of Mr Gary Taylor’s knowledge and experience of the market, we accept his evidence as to this point.”
http://www.bailii.org/cgi-bin/markup.cgi?doc=/uk/cases/UKVAT/2008/V20900.html&query=“Gary+and+Taylor”&method=boolean
@Gary
So you’re an expert in phones who, wisely, tells the truth before Courts.
So?
@Richard Murphy
Lets remind ourselves of the relevant posts in this thread;
1) You made an assertion
2) I asked how you know and provided some competing ‘evidence’
3) You said it wasn’t ‘evidence’
4) I said it was ‘evidence’ and I bloody well should know what constitutes evidence ‘cos its my day job
5) you said: “prove it”
6) I did
So – I know what evidence is and I know I have given some to you (when you suggested I hadn’t). That’s all. No more and no less. You asked a question and I answered it. If the answer is of no importance then you needn’t (shouldn’t?) have asked it.
@Gary Taylor
Many thanks for your reply on Orange Book / Tea Party.
I think we’re going to have to agree to disagree on this one. Your description of the Tea Party sounds (to me) like a fairly accurate description of the Orange Book position. I don’t think the Orange Book is anything to do with social democracy. It’s a ‘liberal’ position under one interpretation, but that’s a very over-used political descriptor these days (like progressive). I think people like Clegg and Laws are small-state libertarians who wouldn’t know social justice if it came up to them and shook their hand. Clegg’s incoherent attempts to defend the coalition govt’s slasher budget against cogent criticisms that it hurts the poor most of all are ample proof of this.
I think OB *is* a minimal state philosophy and isn’t compatible with social justice, because I don’t think social justice can be achieved without significant amounts of redistribution and high-quality public services. That doesn’t mean that I’m wedded to a monolithic public sector delivery model – but it does mean that I don’t accept back-door privatisation as an acceptable outcome from public sector reform. (And after the mess the bankers have made of the economy it’s clear that PRIVATE sector reform is a much more pressing issue for this country than public sector reform).
What you’ve described as the Orange Book view sounds to me more like the Blairite New Labour view (what Tony Blair used to believe before he became a raving neo-con). For example, the Blairites were/are for privatisation of public service delivery where possible (e.g. academy schools, ISTCs in the NHS, etc.)
I think the main reason that this coalition govt will fall apart over the next couple of years is that most Lib Dems are neither hard-right Orange Bookers nor Blairites – they are more traditional social democrats, and won’t be able to take the complete destruction of UK public services lying down. A party split – and another election by 2012 or so – looks pretty much inevitable. I think Clegg will end up being absorbed into the Tory party.
@Gary:
It’s a shame, but we seem to have gone down a cul-de-sac here. You originally claimed to offer evidence that the WB/PwC said that tax revenues are not associated with a higher provision of services across countries. As I’ve pointed out, the statement in question refers to tax rates, not revenues, and may well also reflect a piece of developing country-only analysis (and so would not support the point you claimed) – although because it’s unpublished, and the language is arguable, as you suggest, we may never know.
I’m afraid I’d think to rewrite your summary more like this:
1) Richard made an assertion
2) You asked how he know and provided some competing ‘evidence’
3) That ‘evidence’ was challenged and did not seem to support the claim
4) You “said it was ‘evidence’ and I bloody well should know what constitutes evidence ‘cos its my day job”, and then proved that you had given (well-received) evidence in court on an unrelated question.
As per my previous comment, I think we might be able to agree on a question for further research, around the extent of benefits for human experience that might typically be associated with higher tax/GDP ratios, up until some point, and where that point might be. I know you’ve dismissed this proposal, but I can’t see where else to go with this.
It’s good to be challenged; but the discussion does need to be based on evidence.
@Alex
No, Alex, no cul-de-sac. Let’s imagine for a moment that the counterfactuals like Italy don’t matter. Let’s ignore the NHS experience. Let’s forget the fact the tax rates and payable are the same thing in developed countries, and that they are not associated with better services across countries. let’s just forget everything I raised.
My question was simple, reasonable, relevant and legitimate. And after 5 days, 63 comments and a handful of insults, it remains unanswered. How do you know? Given the time that you (plural) have invested in this thread, it would have been easier just to share some of this ‘mountain of evidence’. Why wouldn’t this collection of world authorities deal with this the easy way and share some of this compelling evidence?
@Howard
Fair enough, we’ll agree to disagree on this one, but I genuinely had no idea that a Lib Dem position would be greeted as extreme and practically indistinguishable from libertation and Tea Party. It would be fairer for future ‘passers by’ if the comments policy said what it really meant, which seems to be something along the lines of “We don’t want to hear from any Trots or Lib Dems. If your position is further left/right of that, we think you are an extremist. People between those two positions are most welcome to debate as long as its legal, etc”
@Alex
I think your analysis absolutely right
I think your patience commendable
I am working on a response
But all in my good time Gary – and let me assure you – the response basically says you’ve asked a dumb question
@Gary Taylor
I think the idea that the OB is social democratic shows the utter implausibility of your arguments.
The OB is the current manifestation of Manchester liberalism.
See http://homepage.newschool.edu/het//schools/manchester.htm
“the general term “Manchester School” has been used to refer to radical liberalism/libertarianism in economic policy: laissez-faire, free trade, government withdrawal from the economy, and an optimistic stress on the “harmonious” effects of free enterprise capitalism. As a result, the school’s nature is largely “political” rather than purely “economic”. ”
If you call that social democracy you have a weird understanding of such issues.
And Howard’s right – the overlap with the Tea Party is strong
Today’s counterfactual:
Imagine a public service. imagine we privatised it in one region, but not another: that would be great because we get something of a controlled experiment. Limitations I know, but useful nonetheless.
Aha! here’s one! Following the introduction of privatisation in the water industry in England and Wales, services become considerably better than in nationalised Scotland (where presumably it is easier to deliver service ‘cos it rains so bloody much).
What’s that you say? That the private sector always introduces more waste and therefore cost? Nope. It seems they are similar. More services for the same cost seems to be one conclusion we can draw.
My point is simple: There is enough out there to make my question legitimate: How do you *know* that more tax revenues *will* deliver better public services?
http://www.watercommission.co.uk/UserFiles/Documents/WICS%20Customer%20Service%20FINAL%20WEB%20VERSION_1.pdf
http://www.ofwat.gov.uk/legacy/aptrix/ofwat/publish.nsf/Content/rpt_int_08unitcostswater.html
@Richard Murphy
Don’t put yourself out if that’s where you are heading. You made an assertion without support and I asked for some. That’s all really, and its nothing unusual in common debate. You think it is dumb of me to ask you for suporting evidence. Fine. It’s your blog and you don’t have to do anything.
Whether you wont or can’t provide support must therefore remain an open question.
As I said to another poster Richard, you would probably save lots of people lots of inconvenience if you expanded your Comments Policy to make clear that you are not interested in hearing from people to the right of Simon Hughes (or wherever you think the line to be) or to the left of Trots or wherever.
Your intended audience is actually a lot tigher than the current Comments policy suggests and you are perhaps getting more unwelcome comments than you want because people like me think LibDems (for example) are mainstream when under your definition they are extremists.
Its just a suggestion, not a request or a debate opener. No replies required.
[…] have noted the extensive discussion on one of my blogs concerning the value of public […]
@Gary
I didn’t say you couldn’t comment
I said you’ve made some pretty absurd comments that suggest arch neo-liberals are social democrats
I’m suggesting that says you have little idea what you’re talking about – which is something quite different, but which I have explored in more depth here http://www.taxresearch.org.uk/Blog/2010/09/13/why-neo-liberals-ask-the-wrong-questions/
So far all you’ve proven is a) a closed mind b) no small arrogance c) an inability to appraise evidence d) a lack of political awareness e) an inability to ask the right question f) a considerable lack of understanding of tax
But I’ve tolerated you none the less
I’d call that quite a broad minded comments policy
But you may differ
@Richard Murphy
Let’s take Hong Kong and Singapore for starters.
And having just spent a week in South Africa in the middle of a poorly coordinated civil servants strike, South Africa’s Revenue Services is certainly a darn sight more efficient than HMRC while their immigration services make the UK positively 3rd world (and refuse is collected weekly too).
@Gary
Given the World Bank’s well documented alignment with the Chicago School, which favours amongst other things unfettered free-market economics, I hardly think that the evidence you provide can be considered in any way “impartial” if that is indeed what you meant by your comment.
There is, by way of a reference to source material, an excellent summary of ‘The Shock Doctrine’ by Naomi Klein here: http://www.davidhilfiker.com/docs/Economics/The%20Shock%20Doctrine%20-%20summary.htm
[…] have noted the extensive discussion on one of my blogs concerning the value of public […]
@Rob Horton
Richard. I have to say I Agree. If you can’t sack anyone for being useless you are dead in the water. I’ve had direct experience of public and private. I know how hard it is to remove a problem employee in the public sector.It’s total hell, so it rarely happens. Fact. Sorry.
@Richard Allen
I wonder if we might find statistics on corruption in the public vs private sector. With the likes of Maxwell, Madoff, Ebbers and so on it would appear that the private sector’s abilities in this record might be described as fecund.
I don’t disagree with the anecdotal assertion that the public sector is far more lenient an employer but seems to be Richard’s general tenor, we can’t possibly isolate “good staff vs bad” situations and make value judgements on private vs public as a whole, the matter is simply far too complex.
Hang on – this might shed some light on the matter: http://www.independent.co.uk/news/business/analysis-and-features/british-companies-set-for-crackdown-on-corruption-1965531.html
Greg @ September 9th, 2010 at 18:12
Advice on endearment from someone who (falsely) suggests that hundreds of innocent pensioners are involved in tax fraud?
Until the Guernsey government intercedes in the matter of the fund using a Guernsey based company to act as the fund’s “Trustees” then the PSG will assume that there is little to distinguish between the ethical framework of the Guernsey and Isle of Man governments.
@SFL You can’t legislate moral behaviour. I spent 20 years in the music industry and a common question was “Will I be ripped off if I sign this” I always said, if someone is going to rip you off they will do it no matter what you have signed. Strong organisations are built on moral strength at every level management and employees. If you stifle the ability of managers to manage by trying to legislate morals then they can’t do their job. I agree the private sector is full of crooks but if the suggestion is that the public sector isn’t I’ve lost you. I’m not an economist (and I am guessing most people on this blog are). I recall questioning the theory that all consumers have equal choice at school and being told not to question it but to learn it. Life isn’t that simple.
Further to the comment that the private sector appears to be proficient at breeding crooks here are two example of criminals that rose through a Government structure. Albert Speer and Stalin… I’m sure I could think of more.